U.S. stock indices and Treasury yields rose Monday in hopes that the Fed would cut rates in 2024. The Nasdaq Composite rose 0.9% to peak at 20,093, hitting a record high above the level it breached for the first time last week. Strong performance within the semiconductor sector was led by Micron Technology (MU, Financial) and Broadcom (AVGO, Financial), both of which have been making hay in the increasing demand for one thing: chips used in AI and other tech.
At the same time, a positive economic signal accompanied this upward momentum. The December U.S. Composite PMI from S&P Global marked the fastest expansion in over two years with a sharp rise in business activity. That suggests the U.S. economy is resilient to past rate hikes.
Investors are watching and looking toward next week's Federal Reserve meeting, where a reduction in interest rates could suggest a turn toward a more accommodative monetary policy. The growth prognosis on the PMI data also added to optimism that the economy can weather higher conditions. Analysts, of course, have their eyes on these unfoldings for clues about what the Fed will do in 2025 and more from policymakers ahead to steer the market.
